Preparing Your Estate Plan - Edward Jones · Life Insurance. Replaces your income for dependents...

Preparing Your Estate Plan

1MKD-3231J-A-SL EXP 30 JUN 2022 © 2020 EDWARD D. JONES & CO, L.P. ALL RIGHTS RESERVED.

1WHERE

AM I TODAY?

2WHERE

WOULD I LIKE TO BE?

3CANI GET

THERE?

4HOW DO

I GET THERE?

5HOW CAN I STAY ON TRACK?

MY FINANCIAL

NEEDS

®

2MKD-3231J-A-SL EXP 30 JUN 2022 © 2020 EDWARD D. JONES & CO, L.P. ALL RIGHTS RESERVED. 2

Three Key Portfolio Concerns

123

Plan for the Expected

Prepare for the Unexpected

Position Your Portfolio for Both


Your Edward Jones financial advisor

Estate-planning attorney

Qualified tax professional

A Team Approach

Edward Jones, its employees and financial advisors are not estate planners and cannot provide tax or legal advice.

You should consult with a qualified tax specialist or legal advisor for professional advice on your situation.


Estate Goals

Asset transfer

Incapacity protection

Guardian for minors or dependents

Charitable intent

Tax planning

Business succession


OverviewAccount registration

Beneficiary designation

Will

Trust

Important tax information

Life insurance

Transfer on Death


Account Registration & Beneficiary DesignationInvestments

Bank accounts

Retirement accounts

Insurance policies

Pension

Property7MKD-3231J-A-SL EXP 30 JUN 2022 © 2020 EDWARD D. JONES & CO, L.P. ALL RIGHTS RESERVED.

Beneficiary Designation

Accounts that designate a beneficiary are not controlled by a will or trust.

Ensure current information on all:

— Life insurance policies and annuities

— Retirement accounts

— Other investment and banking accounts


What Is a Will?

Legal document that governs the distribution of assets in your name

Determines who gets what when you die


Don’t Have a Will When You Die?Your estate goes into “intestacy.”

Assets without a beneficiary designation will be distributed according to the laws of your state.


Role of ExecutorEstablish validity of will

Collect assets of the estate

File tax returns

Distribute assets to trustees and other beneficiaries

Pay final expenses and taxes


Probate

A judge determines whether the will is valid

— Was it properly executed?

— Has it been revoked prior to your death?

The judge signs a court order granting power to the executor.


Important Documents

Durable power of attorney

Health care power of attorney

Living will


What Is a Trust?

A legal arrangement in which an individual gives control of property to a person or institution (the trustee) for the benefit of beneficiaries.


What Can a Trust Do?

Provide for a child with special needs

Restrict inheritances

Provide tax benefits


Role of a Trustee

Establish and implement an investment strategy for the trust’s assets

Record keeping and providing accountings to beneficiaries

Pay trust expenses

Make distributions to beneficiaries according to the terms of the trust


Considerations When Naming a Trustee

Experience in managing financial affairs

Fair and unbiased

Willing to devote time and energy


Professional Trustee ConsiderationsDoes the institution offer an experienced staff of attorneys, accountants and trust administrators?

Does it have a written investment philosophy that matches yours?

Will it provide ongoing communication and be accessible for questions?

Will you receive written monthly reports?


Revocable Living TrustCreated while you’re alive

Can be changed or revoked at any time

Becomes irrevocable at your death

Determines who gets what when you die


Revocable Living Trust Benefits

Provides financial instructions during incapacity

Names trustees to manage trust assets

Avoids probate

Provides privacy


Testamentary Trust

Created using your will

Becomes effective at your death

Subject to probate process


Nonmarital Transfers

When you die, your estate must pay your estate taxes

Estate tax exemption

Tax rate after exemption


Marital Transfers

Unlimited deduction for transfers between spouses

No estate taxes due on first spouse’s death

Assets included in estate of surviving spouse


Credit Shelter Trust

Created upon death of first spouse and funded up to the amount of the federal estate tax exemption

Any remaining assets can pass to the surviving spouse without being taxed due to the marital deduction


Credit Shelter Trust Benefits

Can help reduce or eliminate estate taxes

Can provide income to surviving spouse

After surviving spouse’s death, trust assets pass to beneficiaries


Portability

Surviving spouse can retain the deceased spouse’s unused exemption amount

Dollars passed by portability are not protected from generation-skipping tax


QTIP Marital Trust Qualifies for Estate Tax Marital DeductionSurviving spouse receives income from trust assets

— Principal distributions may be allowed

— Unlimited marital deduction may apply

When surviving spouse dies, trust assets pass to beneficiaries.


Irrevocable Life Insurance Trust

Specifically designed to hold life insurance

Proceeds not included in estate at death


Life InsuranceReplaces your income for dependents

Offsets expenses, such as estate taxes, attorney fees and debts, that your estate may owe when you die

Provides immediate source of funds for beneficiaries

Protects a family business from liquidation when you die


Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P. and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.

Life Insurance Types

Term

Permanent


Term Life InsuranceProtects survivors against financial hardship

Death benefits to heirs are free from federal income tax

Less expensive than permanent

15–20 years of protection

Can be convertedEdward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P., and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.


Permanent Life InsuranceEntire lifetime coverage

Earnings are tax-deferred

Loans are generally tax-free

Death benefits to heirs are free of federal income tax

Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P., and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.


Additional Estate- planning ToolTransfer on Death


Transfer on Death

Can reduce time to transfer certain investments

Avoids probate

Allows financial services firm to transfer account assets

Does not apply to real estate, personal property or assets that have a beneficiary

May be modified or revoked during lifetime

May include relatives, friends, charities or trusts

Supersedes will or trust for asset in that account


&AnswersQuestions


Edward Jones, its employees and financial advisors are not estate planners and cannot provide tax or legal advice. You should consult with a qualified tax advisor or legal professional for professional advice on your specific situation.

Thank You

edwardjones.com Member SIPC

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Preparing Your Estate Plan - Edward Jones · Life Insurance. Replaces your income for dependents...

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